J&J cannot use the bankruptcy of its subsidiary, LTL Management LLC, to settle claims that its talc-based products, like baby powder, caused cancer, Judge Michael Kaplan of the US Bankruptcy Court for the District of New Jersey ruled July 28.
The ruling leaves J&J boxed out of its preferred venue to settle the claims, although the company said it would appeal. Aside from an appeal, J&J can settle individual claims, negotiate with plaintiff firms or pursue a global settlement.
J&J didn’t immediately respond to a request for comment. Lawyers pursuing claims against the company are weighing next steps, and some have said they are continuing to discuss a resolution with J&J.
Although it would be more challenging for the company to resolve all claims through mass tort litigation,“there are ways of resolving this outside of bankruptcy,” said Otterbourg PC attorney Adam Silverstein, who represents the official committee of claimants in the LTL bankruptcy.
LTL was not in “imminent and immediate financial distress” and therefore did not qualify for the benefits of bankruptcy, Kaplan ruled.